$1 million opportunity?

Question

My goal other than Wholesale is to house hack via multifamily. I've been networking for some time now and a co-worker of mine noticed my "we buy houses" car magnet and told me about a property he and his girlfriend inherited. It's a triplex and he always gets people knocking on his door to purchase his property for $1 million. The property is in a great location, taxes are $12k, basement is not finished, last updates were 7-10 years ago and currently has tenants upstairs. He doesn't want to sell it to other investors, but would rather get me into the deal because he knows me and not the other people. He doesn't want a lump some of money and is looking for a cash flow with an intention to sell I believe. His motivation seems to be that he knows that the property has great potential, but he knows that he won't put the work in the property himself, that's why he's approaching me. He doesn't know about seller financing or lease options and this property meets my criteria on living and renting the units out, which might rent for $6k per unit based on the location. I may have investors that would want to partner on the deal, but so far I've met people who are only looking to fix & flip.

Is this deal too much for me to take on? I'm doing my best with thinking of creative solutions to acquire with opm, rehab, and rent to tenants while the seller is receiving their cash flow. I even thought about possibly partnering with him and manage the property, but I feel I need more skin in the game. I've also thought about getting the property under contract to seller finance and wholesale the deal, but I need to let him know what I'm planning to do, so he knows. Plus I really want to live in the property. Any advice would be greatly appreciated.

Mark Collard · Answer

Hi @Jay Hinrichs - sorry buddy, my site has been down for a few months, and I have NOT rebuilt it yet.   But, even when it was up, it was just general info on me and a few videos, I don't have need for it much anymore as the NETWORK is super active and I leverage social media and meetup, etc...  or at least that's my excuse for now.  LOL!

Anyway, no, I do an ala carte type deal, cause everyone has different needs, so just like my agency consult for listings or buyers, I do a coaching consult(usually hour and 1/2) to identify someone's needs and then pretty much customize.   I coach agents and teams too, so haven't taken time to put it out there.   Pretty picky with who I coach now a days, as my time with my family is most important.      Check out meetup.com/outback to see some of our Outback REIN activities and past and present events here in Vegas.  Might give you some ideas, and I'm always glad to connect with anyone that wants to connect.   You can always send a private message and I can share my details.

@Jon Lee is my partner with Outback REIN, and we live to help people get better, faster and stronger pertinent to real estate, wealth building opportunities and personal/professional growth.

Regards,Coach - Mark Collard

Mark Collard · Answer

Hi Russell, I'm responding b/c I have 19+ years with creative/seller finance tools from lease option to subject to and all in between.  So, making an assumption that you quick summary of the valuation and possible rents is correct, and the seller's willingess to work with you rather than others is a huge benefit and competive edge.

Rather than putting a disertation together here, I'll say this... I have personal experience with a 29 property rental portfolio of my own, with 14 of the properties being over a million and dealing with payments at and above $6k/monthly up to $13k/monthly.

That all being said, this SOUNDS on the surface like an opportunity of a lifetime.   I would NOT concern myself initially with what's owed other than in conversation, as you can protect yourself through due diligence by writing a contract that is contingent upon verifying every last detail of the underlying finance.

If you'd like to discuss further, it would be best to coordinate a call and discuss specific details.

Regards,Coach - Mark Collard

Brandon Sturgill · Answer

Account Closed Too funny...yeah...not a fan of speculation and we try to keep our buyers protected whenever we can. The worst part about any transitioning market is the real estate agents...

I can't tell you how frequently I report these guys for flat out lying about location and condition...total scandals.

Account Closed · Answer

Sorry this isn't related to the thread at hand, but I looked at your website and getting a kick out of the "notes" section on those pre-analyzed pro formas.  Mooberry st, "Boarded up sh-t hole with squatters." ..  The listing actually has pictures of the squatters laying in the filth!   I love it.  So much absolute garbage on the market now that Columbus real estate went bananas.

That house is worse than the Fight Club house.

Mark Collard · Answer

@Brandon Sturgill - :)   Always glad to help in anyway.  Appreciate that.   Reach out if you ever wish to connect and share further.  I'll make time for you.

Mark Collard · Answer

@Brandon Sturgill - likely better to discuss in person and give you specific details and answer any questions.  But, generally, it's a one on one or group/family on one, depending upon needs, and then I do the following:    up to 2 hours weekly face to face or video, generally in 1 or 2 sessions, and keep it that way intense for 90 days.   Very hands on and very intense out of the gates for 90 days to create a hands on experience for student and then also to have real life actitivites and "live" opportunities.   After that, I support and coach on an as needed basis for up to 12 months, or longer if the student is really active and stays in action.   I document everything, from concepts to teachings to contracts to you name it... so, by 90-days, they have an organized library and practice touching all aspects.   I use technology to support driving the business and scale, so I prefer to be paperless(although some of my students are tech challenged over 50+  years old... LOL!).

Waiting for a friend right now at the hospital, so able to share now too...

Progam covers A to Z of everything I know, things like but not limited to:

- traditional finance

- seller finance  - lease/options, lease/purchase, subject to, wraps, seller carry,               contract 4 deed(or agreement for deed depending upon state), and other              contractual control tools for real estate

- agency vs investing (much like water and oil)

- wholesaling, wholetaling, retail wholesaling and other forms of leverage

- building a network for business not for show

- DISC personality quadrant study and knowing thyself and reading others

- general and specific value props in order to grow and communicate your business

- phone work - I'm a believer in 1-2-3 of growing business

1) prospecting - face to face or voice to voice - seller and buyer conversations

takes time, no $$ and masters the important conversation of real estate - can             do from the beginning with a phone and craigslist or zillow or an expired list

- provides immediate results and feedback

2) networking - face to face, time activity and overtakes your over time

takes time, some money and builds your NET or power team and brings                        referrals and relationships for credibility - immediate activity, delayed results

3) marketing - anything you feel will work or is worth your time from direct mail to          bandit signs to websites and PPC -

- $$ up front, little time, and can over take you if you do it right - many newbies          use this as a crutch to get in, but never get traction cause they don't value the              conversation with sellers/buyers in order to master the idea of finding my 3                favorite things... DMF - distress, motivation or flexibility - or all 3.

I prefer to always work with HIGHLY motivated people... RE:  sellers, buyers or agency clients.

- Technology and how to leverage for sanity and scale

- Negotiations

- Contract law, state statutes and contracts

- Personal empowerment and how to treat everyone with respect even if you don't       do business with them, in order to earn business later and referrals and resources

- presenting offers, not just making offers - asking for the business or sale

- title vs escrow vs attorneys - not necessarily vs but pertaining to how different

states require for closings, etc.

- fiduciary vs functionary

- NOD or foreclosure process - state by state(focused on area of desire)

- mortgage(Judiciary) vs trustee sale(non-judiciary) states

- capital gains vs cash flow

- OPM, OPC, OPT, OPMii, OPE - can explain later

- entities and general asset protection including llc, llps et al to include land                   trusts(anonymity tool - no real protection, but great function)

- creating, buying, selling and trading notes to include discounts and partials

- mobile homes and everything around them - financing, parks, history and

opportunity - cash flow monsters

- tying up land for monster plays - still learning this, but I share everything I know as     time allows

Glad to share more as you are interested.

Regards,

Coach - Mark Collard

Mark Collard · Answer

@Brandon Sturgill - FYI, visited with Russell @Russell Santos this AM on the details I'm about to share wtih you.   Thanks for reaching out and asking.  All of your points since initial engagement with Russell are well taken, and I do NOT disagree with them.  It's just my technique of engaging sellers is a bit different than most.

I'm not a proponent(personally) of spending time assuming any direction on an opportunity until I am clear on what the seller's true needs and intentions are.  I saw in his original post that he's NOT clear on what the seller truly wants, so I suggested that he visit in person or directly with the seller 1st and get clear on what his/their needs really are, then work on structuring a deal.

To me, ALL opportunities are NOTHING until I speak to a seller and get facts or interpretation of material items.   Once that happens, the tools of cash, finance or seller finance or deal structuring start to reveal themselves for me.   To me, I treat all finance or seller finance( lease/options, lease/purchase, subject to's, wraps, seller carry and contracts for deeds) tools all as screwdrivers, simply stated, they are designed to LEVERAGE or TURN real estate, just like a screw.  From there, based on seller's needs and my purchase strategy, I drill down on which tool may work best, and then apply due diligence against it.

My technique is to NOT say no on the front side, but to allow my due diligence to reveal the possibilities of NO, or reasons I may say NO and address them accordingly.  All that said to say this...I'm not clear on a strategy on the opportunity until he's clear on what the seller is really trying to do, then I can give my best suggestions.  In doing so, stuff like endowments or deed restrictions, etc., reveal themselves.   Also, I personally only work with highly motivated sellers, so generally won't waste time chasing a seller that is NOT highly motivated, which supports your idea above too, of not spinning wheels for a week and wasting valuable time.

Hope this helps.

PS...I'm a full time investor(19+ years), coach of investors(16 years), run the Outback REIN out here in Vegas(7+ yrs), and also work full time as an agent/Realtor too(12 years).  Glad to visit or share more as needed.

Regards,Coach - Mark Collard

Brandon Sturgill · Answer

@Russell Santos I think there are a few missing pieces that would help make a better informed response...does he own this without a lien "free-and-clear?"

Not exactly sure where this is located, but the rents and shear cost of this property aren't really registering. That said, this may be a great deal for you...its all relative. Do you have a good set of comps that dictate value?

Step one is discovering if there is a lien on the property...that will determine your overall deal structure.

Brandon Sturgill · Answer

@Mark Collard Thanks for providing...looks like you might have a couple menu items I can use ;)

Jay Hinrichs · Answer

@Mark Collard  do you have a website were you describe your fee's for all of these services. or is it kind of ala carte ?

do you only take on a few clients at a time to give this kind of attention to detail.

I only ask B/C i was thinking of doing something similar on more of a one on one on the areas of real estate that i have better than average knowledge of..  You know taking a few really motivated and PROPERLY capitalized folks and really laying out a game plan and help them get started without years of learning this stuff like we have done..

$1 million opportunity?

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